More seek benefit advances

STRUGGLE: Advances are used for basics.

Cash-strapped Wairarapa and Central district beneficiaries are receiving millions of dollars in advance welfare payments, mostly to cover bond, rent or outstanding power bills.

Beneficiaries can request multiple advance payments to cover emergency expenses each year. But they must pay the money back from their weekly welfare payments - unlike hardship grants offered by Work and Income.

Ministry of Social Development figures released under the Official Information Act show Work and Income processed 20,161 advance payment applications for the Central region, which includes Wairarapa, in the 2012-13 financial year. This was down from 20,353 in 2011-12 and 22,704 in 2010-11.

Most applications were to cover rent and bonds, followed by accommodation, electricity and gas.

Although the number of applications has dropped, 18,712 were approved and 1449 declined last year.

The average amount advanced was $406, while the largest advance payment was $2962 for car repair.

In total, $7,601,187 was paid out in advance payments to Central beneficiaries last year, up from $7,341,499 in 2011-2012 and $7,170,558 in 2010-11.

Wairarapa Free Budget Advisory Service manager Grant Howard said beneficiaries were more likely to get an application approved if an advocate accompanied them to Work and Income.

Applications for bonds and rent were most common, he said.

"The bonds are so expensive, they're paying $1600-$1800 bond and of course not many people on a low income can afford that."

Applications for whiteware were next on the list, which clients could buy new at a discounted rate through Fisher and Paykel, he said.

Nationwide, Work and Income gave out 306,528 advance payments last year totalling more than $113 million, down from 403,828 payments in 2010-11 totalling nearly $129 million.

The money was mostly needed to cover bond or rent, followed by accommodation and electricity or gas. Other expenses included whiteware, car repairs and school uniforms.

Federation of Family Budgeting Services chief executive Raewyn Fox said the drop in applications was partly due to the corresponding drop in unemployment.

But it also reflected that many beneficiaries had already had several advances during the global financial crisis.

"If you get any more advances you can't afford to live."

"If somebody's on the benefit or really low income it's quite likely that they struggle with their rent anyway, particularly in areas where the rent's high."

After rent, power was the most expensive essential household item, she said.

"If you're on a limited income per week and you get a bill of $300 or $400, you just don't have enough money to pay for it.

"Sometimes [beneficiaries] choose to feed their families instead of paying their bills - they don't have easy choices." -APNZ